window.dataLayer = window.dataLayer || []; function gtag(){dataLayer.push(arguments);} gtag('js', new Date()); gtag('config', 'UA-40380700-1');

 +44 (0)1527 895 020

Black Friday: Expectations vs. Reality

Black Friday

Share this  

November 2012 saw no rise in sales figures from the previous month. Reports of people reigning in their spending before Christmas was the main retail news story in the UK, hopes of a good Christmas for retailers were dampened.

Fast forward to Friday 29 November 2013, Asda introduced UK shoppers to Black Friday. I’m sure we all remember the news from that year. There were queues to get in-store, the items reduced in the Black Friday sale sold in hours, police were called in many towns to deal with incidents in Asda and Tesco stores, people were hospitalised and the news coverage was predominantly negative. It’s perhaps not surprising that following this coverage, some retailers decided to not consider the Black Friday concept at all. However, Black Friday 2013 did see sales of £435m, so it’s also not surprising why so many retailers chose to join in with the sale in 2014.

What are the advantages of a pre-Christmas sale for retailers?

Black Friday has been an event in the US retail calendar since the 1950s, although the name only became fixed and as widely used as it is until several decades later. In the UK during this time, the idea of having a sale before Christmas was a big taboo. Amazon started introducing some Black Friday deals to the UK in 2010, but the main reports from this were that the deals sold out and the website kept crashing.

In 2014, Black Friday sales in the UK rose to £810m, which was further surpassed in 2015 by sales of £1.1bn. Smoothing out the Christmas sales peaks allows retailers to offer better customer service over the period. Since the negative headlines, much of the focus of Black Friday has shifted to online sales. This makes order fulfilment much easier. Orders are placed in plenty of time to be received by the customer in time for Christmas.

Increased traffic to your website is always welcome. It helps to get your message across and increase the likelihood of sales. Abandonment rates have been found to decrease by as much as 10% over Black Friday weekend.

How has Black Friday evolved since its UK introduction?

Since 2015, the focus has shifted from one day to spread the load to multiple days. The Monday following Black Friday is now ‘Cyber Monday’. Retailers in a bid to increase the positive effects of Black Friday have spread the sales event throughout the week or even longer. There may be daily promotions within the extended sale period, to encourage repeat customers. Sales of non-reduced items tend to increase during this period also. The effect has been so large that it was expected for sales to reach £7bn over Black Friday 2018 weekend.

To differentiate between the longer sales and the one day price reductions some retailers are changing the name, such as the Currys PC World Black Tag event. This sale is then discussed in the same news items about Black Friday, but immediately lets the customer know it is not just for one day.

The big fear for retailers around Black Friday is that it cannibalises sales from elsewhere in the year, at reduced prices and doesn’t actually generate any further revenue than would have been spent otherwise.

What are the drawbacks of a one day sale?

The negative publicity following the chaos during Black Friday 2013 has seen Asda withdraw from participating in the sale. They reportedly spoke to their customers and found that reducing prices throughout the year was important to them, Asda have focused their energies in this direction ever since.

Customers will now expect a discounted sales period, which can impact negatively on tight margins. If expected sales targets are not met during Black Friday, further price reductions may have to be applied to increase sales. Both Debenhams and House of Fraser had a pre-Christmas weekend in December 2017 where they reduced prices to increase sales.

The flip side to easier fulfilment from Black Friday sales is that returns may then have to be processed during this time critical period. Clearly this is a necessary task, but it makes distribution centres even busier than they would otherwise be.

B&Q opted not to participate in Black Friday 2018 as they found research citing that almost half of consumers were not planning to participate in the event. There have been increasing complaints that the items shoppers purchased in all Black Friday sales were available at other times of the year at lower prices. B&Q has followed the same strategy as Asda and will work to reduce prices year-round. IKEA have always cited the same reasoning for their lack of participation.

The big fear for retailers around Black Friday is that it cannibalises sales from elsewhere in the year, at reduced prices and doesn’t actually generate any further revenue than would have been spent otherwise. Defenders, such as Argos chief executive John Rogers, cite that it is an opportunity to give real deals to customers.

So did Black Friday 2018 surpass expectations?

Adobe Analytics reports that in the US, year on year Black Friday sales increased by 23.6%, with a total of $6.22bn spent. In the UK, online sales increased 11.7% on last year, whereas in retail stores sales were down by 3.6%. Taking the weekend as a whole however, the total spent is more than £7bn over the 4 day weekend. This is in comparison with £19.2bn spent over the rest of 2018 as a whole. The same 4 days in 2017 saw £4.5bn spent, a total which has been eclipsed by the total spent this year.

Retailers such as John Lewis have clearly identified what the focus areas are of Black Friday shoppers attention, by discounting the right items. John Lewis reported record sales for them in the week of the Black Friday 2018 sale. Gadgets, Beauty Products and Homeware were the biggest selling sectors for them.

Fashion, Furniture and Hardware shops reported the lowest sales figures. As some of the brand leaders in these fields, such as B&Q and IKEA, do not participate, this is perhaps not the most surprising information.

The recipe for success of any Black Friday sale in the UK, must combine solid preparation with agility to handle changing demands throughout the sales period. Identify the target areas of customer interest and maximise opportunities for customer attention to be drawn there.

What we know for sure at SWL… is that our Productivity Models and expert insight in retail seasonality has enabled our customers to forecast correctly in high demand periods, ensuring that desired customer service is always maintained, costs controlled, and sales are maximised.

Get in touch with us to find out more.

Share this